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The Very Good Food Company Inc. (CSE:VERY.CA; OTC:VRYYF), based in Canada (Victoria, B.C.), is an emerging plant-based technology company focused on developing, producing, and distributing plant-based meat alternatives and describes itself as a company that is “butchering beans, not animals.” Very Good Food Company (i.e. VGFC) went public in June of 2020 at C$0.25/share and is currently trading around at C$1.73 (US$1.32).

The Marketplace

• According to Barclays, the alternative food industry is expected to reach $140 billion over the next decade, which would account for 10% of the global meat industry and,
• according to BIS Research, the plant-based food and beverage alternatives market is expected to reach $80.43 billion by 2024, with a CAGR of 13.82% from 2019 to 2024. 

While the plant-based protein industry has received high levels of attention due to consistency of products, lower production costs, and benefits in environmental sustainability it has, however, struggles due to undesirable flavors and sub-par nutritional values

Its Origins

VGFC started off as a small shop serving its local community in 2016, opened the first plant-based butchery in 2017 called the “Very Good Butchers” and has since been growing rapidly.  

Its Sales Model

• VGFC generates revenues through:
  • 200+ retailer and restaurant customers,
  • an eCommerce store (see here) with 700+ active subscribers for its monthly subscription plan,
  • and a wholesale program with 100+ active customers.
• Its business is currently concentrated in Western Canada but has plans to expand its retail presence
  • to Central/Eastern Canada later this year,
  • into the U.S. early next year
  • and into Europe and Asia after that.
• To meet the expected demand they are scaling up production capabilities with:
  • the opening of a second processing facility in B.C. which should be operational by the end of 2020
  • and the rental of a strategically located California production facility.

Its Latest 2020 Financials - Q2 (currency is in Canadian dollars)

• Revenue: C$1.1 million (an increase of 395% year over year)
• Gross Profit Margin: 42% (outperforming the gross margin of competitor and industry giant Beyond Meat's 30%
• Net Loss: C$(1.65 million)
• Net Loss/Share: C$(0.03)
• Cash Balance: C$3,508,826

Management Commentary

Said CEO Mitchell Scott:

• “We were extremely pleased with our financial performance this quarter, with revenue growth and gross margins both producing industry leading results.
• With a very healthy balance sheet and quickly growing demand for our products, we are in a position of strength as we charge forward with our international expansion.
• Over the coming quarters, investors can expect to see significant progress on our next phase of growth, as we transition to becoming a much larger company with global ambitions.”

Stock Performance

As mentioned in the opening paragraph, Very Good Food Company went public in June of 2020 at C$0.25/share and is currently trading around C$1.60.

This is the third (read the first article here and the second article here) in a series of articles on the plant-based food category. In future we intend to will on the latest news of Beyond Meat Inc. (BYND); Else Nutrition Holdings Inc. (BABYF); Modern Meat Holdings Inc. (CSE: MEAT) and the Burcon NutraScience Corp. (BUROF).